1963 (4) TMI 75 - SC - Indian Laws

Supreme Court upholds Tribunal's decision on insurer's compensation appeal

Hindustan Ideal Insurance Co. Limited Versus Life Insurance Corporation Limited

The Supreme Court dismissed the appeal, upholding the Tribunal's findings that the insurer's direct approach for reassessment of compensation was ... - Issues Involved:1. Whether the insurer had the right to directly approach the Tribunal for reassessment of compensation.2. Whether the insurer's claim was barred by time.3. Whether the Tribunal was correct in refusing to extend the time for making the application.Issue-wise Detailed Analysis:1. Right to Approach the Tribunal Directly:The primary issue was whether the insurer could directly approach the Tribunal for reassessment of compensation. According to Section 16(2) of the Life Insurance Corporation Act, 1956, the insurer must move the Corporation to make a reference of the dispute to the Tribunal. The court emphasized that the insurer has no right under the section to approach the Tribunal directly. The procedure mandated that the insurer had to move the Corporation, which would then refer the dispute to the Tribunal. The insurer's direct approach to the Tribunal was deemed wholly misconceived, rendering the proceedings incompetent from the beginning. Consequently, neither the Tribunal nor the Court could grant any relief to the insurer or its successor-in-interest.2. Claim Barred by Time:The Tribunal held that the insurer's claim was barred by time, as it did not lodge a claim within the prescribed three months from the date on which the compensation was offered by the Corporation. Rule 12 of the Rules framed under the Act stipulates that a reference to the Tribunal must be made within three months from the date the compensation is offered. The insurer failed to act within this period, and the Tribunal found no sufficient cause to extend the time. The Supreme Court concurred with this view, stating that the insurer did not show any cause for the delay. The Tribunal's decision to dismiss the claim on the grounds of limitation was upheld.3. Refusal to Extend Time:The insurer had requested the Tribunal to extend the time for making the application. However, since the insurer had no right to move the Tribunal directly, the question of extending time did not arise. Even if the application for extension of time was considered competent under the proviso to Rule 12, the Tribunal found no sufficient cause to justify the delay. The Supreme Court agreed, noting that there was no justification to interfere with the Tribunal's order on this matter. The appeal, therefore, failed on this ground as well.Conclusion:The Supreme Court dismissed the appeal, concluding that the insurer's proceedings were incompetent from the start due to the incorrect procedure followed. The Tribunal's findings on the issues of direct approach, time-bar, and refusal to extend time were upheld. The insurer or its successor-in-interest was advised to move the Corporation for making a reference after the period for doing so is prescribed by the Central Government. No costs were awarded to the Corporation as it had not raised the point of incompetency before the Tribunal or in its statement of case in the appeal.Additional Judgment:The judgment delivered by Mudholkar, J., also emphasized that the insurer must move the Corporation for making a reference to the Tribunal. He highlighted that the Central Government had not prescribed the period within which the insurer must move the Corporation, as required by Section 16(2) of the Act. The rule-making authority's oversight in framing Rule 12 led to a lacuna, resulting in the proceedings before the Tribunal being quashed. Mudholkar, J., reiterated that the insurer could move the Corporation once the period is prescribed.Final Order:Appeal dismissed. Proceedings before the Tribunal quashed. No order as to costs.